TaxConnections


 

Tag Archive for Tax Rules

How Holdbacks Are Treated For Tax Purposes—Canadian Tax

How are holdbacks treated for tax purposes?

The construction industry has special tax rules relating to when the income is recognized for tax purposes.

Discussion:

A holdback amount on each invoice (i.e. 10% of the progress billing) is a typical billing method in the construction industry. The customer does not pay this amount until they have approved the work as 100% completed and without deficiencies. Read more

PATH Act ITIN Renewal Requirements: All ITINs issued before 2013

TaxConnections Member Larry Stolberg

On December 18th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.

The PATH Act ITIN renewal requirements: individuals who were issued Individual Taxpayer Identification Numbers (ITINs) before 2013 to renew their ITINs on a staggered schedule between 2017 and 2020 either in person before an IRS employee or a certified acceptance agent or by mail under procedures to be developed. Documentation proving identity, foreign status and residency is required for renewal. The Act also provides that an ITIN will expire if an individual fails to file a tax return for three consecutive years.

Similar rules apply to individuals residing outside the United States such as Canadians who applied for ITINS and file U.S. tax returns reporting their net rental income from U.S. real estate. It’s important to keep in mind that the

Read more

California State Tax Filing Season Is Officially Open – Part V

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part V.

AB 93 replaces the G-TEDA tax incentives with the New Employment Credit (NEC), the California Competes Credit, and statewide partial sales and use tax exemption for certain manufacturing and research and development equipment.

The New Employment Credit (NEC) is a California income tax credit available to employers for taxable years beginning on or after January 1, 2014, and before January 1, 2021. To obtain a credit a qualified taxpayer must hire a qualified full-time employee on or after Read more

California State Tax Filing Season Is Officially Open – Part IV

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part IV.

Tax Tips

• Volunteer Income Tax Assistance – Starting in February, free tax help is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly Programs (VITA/TCE). Trained volunteers at more than 1,000 sites throughout California provide free help to complete tax forms for low-income, senior, disabled, and non-English speaking persons who need to file simple federal and state tax returns. Read more

California State Tax Filing Season Is Officially Open – Part III

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part III.

Filing Information

Free Do-it-Yourself Services – FTB encourages taxpayers and practitioners to explore its many self-service applications available through FTB’s website:

• CalFile makes filing easier – CalFile is one of FTB’s free, easy-to-use e-file options available to more than 6.4 million taxpayers. CalFile accepts taxpayers with income of up to $345,235, itemized deductions, and some tax credits. Read more

California State Tax Filing Season Is Officially Open – Part II

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part II.

2013 Short Sellers Get State Tax Relief – According to an IRS Information Letter dated September 19, 2013, the IRS has determined that California taxpayers who sell their principal residences where the lender agrees to a short sale for less than what is owed on the home are relieved of incurring cancellation of indebtedness income, which may have been taxable. Instead, the amount of cancelled debt is included in the amount realized in determining gain on the sale of that residence. Read more

California State Tax Filing Season Is Officially Open – Part I

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part I.

What’s New for Individuals

Standard deduction – The standard deduction for single or filing separately tax statuses increased to $3,906. For joint, surviving spouse, or head of household filers, it increased to $7,812.

Exemption credit increases – The dependent exemption credit increased to $326 per Read more

The OECD v. Tax Havens: Part IV – The Digital Economy

The current tax rules underpinning practically every tax code around the globe are derived from a “bricks and mortar” or manufacturing based economy. What this means is the underlying concepts were developed when all world economies were based on building physical products that were bought and sold (think industrial revolution). For example, the tax treaty phrase “permanent establishment” was actually developed by League of Nation’s negotiators during their preliminary discussions to develop a working tax treaty framework. Compare this to today’s digital economy where “products” are actually multiple lines of computer code that exist in cyber-space (or a trademark or patented item) or where a “store front” (the old “permanent establishment”) is in fact a web site located halfway around the globe on a server in a tax haven. This mismatch between the underlying concepts of the old Read more

Meet Tax Experts At TaxConnections...